Indonesia approves Train 3 expansion of Tangguh LNG

Indonesia’s Ministry of Energy and Mineral Resources and oil and gas executive agency BPMigas have approved expansion plans for BP PLC-operated Tangguh LNG in Papua Barat province in eastern Indonesia, according to BP.

BP submitted its plans in early September to develop a third liquefaction train. Indonesian government approval of the plan is a step toward final investment decision for Train 3, which BP expects to take in 2014. This would enable commissioning operations for the new train to begin in late 2018. Total investment in Train 3 by Tangguh project partners is estimated to be up to $12 billion.

BP and partners will begin tendering for the front-end engineering and design (FEED) for Train 3. The train is to add 3.8 million tonnes/year (tpy) liquefaction capacity to Tangguh, bringing total project capacity to 11.4 million tpy.

Under terms of the plan, BP and partners will sell 40% of Train 3’s output to Indonesia’s state electricity company PT.PLN for the Indonesian domestic market.

In addition, up to 15 MMscfd of piped gas, supplied from Tangguh fields and sufficient to generate up to 50 Mw of local power, would be allocated for sale from the date of Train 3’s start-up.

The plan also includes agreement for up to 8 Mw of power generated at Tangguh to be sold to PLN to sell and distribute to residential communities in the Teluk Bintuni Regency. The electricity is to be provided in stages, with the first 4 Mw available in January 2013 and up to 4 Mw more to be provided to PLN in following years to provide electricity to more residential communities.